DANIDA (2010) Fiscal decentralisation and sector-funding principals and practices.
This paper provides a general introduction to Fiscal Decentralisation (FD) and shares lessons learned from a number of developing countries. It also explores the links between FD and sector funding and discusses the use of various aid modalities for support to FD, based on experiences from countries in Africa, Asia and Latin America. A number of technical annexes provide more detailed information on some of the core issues. At the end of the paper, the lessons learned from the reforms of systems and procedures in fiscal decentralisation are presented. The paper recommends that donors move away from a piecemeal approach to supporting FD reforms. It advocates for donors to provide comprehensive support to the entire FD strategy, and to improve coherence and complementarity betweeen different development partners.